Published: 2009

Tax breaks needed to keep us in the solar race, say experts

Mary-Lou Considine

When Australia’s largest solar power project was put in the hands of an administrator in September – weeks after the Australian Government’s new 20 per cent Renewable Energy Target (RET) scheme was approved by parliament – it reinvigorated widespread public debate about the nation’s renewable energy future.

The clean energy sector is seeking stronger incentives from government to encourage investment in solar and other renewables.

Credit: Liddell Solar Farm

The project – a 154-megawatt (MW) photovoltaic (PV) heliostat solar-concentrator power station to be built in Mildura, Victoria, by Melbourne-based Solar Systems – had been unable to secure enough private equity to supplement $125 million of funding allocations pledged by the Federal and Victorian governments.

In 2006, when it was first announced, the Mildura solar power project was described as the world’s largest, with the capacity to power 45 000 homes, reduce Australia’s greenhouse gas emissions by around 400 000 tonnes per year, and create hundreds of jobs in and around Mildura.

Media reporting of Solar Systems’ demise pointed to a number of possible causes – increased risk aversion among prospective private investors prompted by the global financial crisis, larger solar companies overseas undercutting on price, and allegations of restrictions on the flow of funding pledged by both state and federal governments.

Renewable energy expert Dr Mark Diesendorf from the University of NSW believes the Solar Systems venture failed because ‘there are currently no policy mechanisms for funding large-scale renewable energy in this country before 2012’, adding that the new RET scheme favours solar hot water and small-scale PV, leaving little incentive for development of large-scale and emerging renewable technologies.

To its credit, the Australian Government is attempting to close this policy gap with the recent announcement of a $1.365-billion Solar Flagships program to fund up to four large solar power stations with a combined 1000-MW capacity. The plan is to leverage the fund with $2 of state and industry funding for every $1 of federal money, providing a total $4.8 billion.

The Clean Energy Council (CEC) is among a number of renewable energy groups that welcomed the announcement, but has also expressed concern about the adequacy of the budget and the risks associated with ‘picking winners’.

In a recent submission to the government, the CEC stated that the proposed level of funding would not be enough to build a 1000-MW capacity facility, ‘particularly if the focus remains on bringing forward four large (250-MW) projects’.

‘The capital expenditure required to finance large 250-MW projects is considerable,’ the submission continued. ‘The CEC does not believe it is necessary to restrict the project size to four installations of up to 250 MW each.

‘The program should allow the flexibility of development to include smaller projects in addition to those at a larger scale.’

Clean Energy Council Chief Executive, Matthew Warren, told the Australian newspaper that the failure of Solar Systems highlighted the need for venture capital tax concessions and other incentives to attract private investors, on top of large government subsidies.

‘Developing emerging clean energy technologies is an inherently risky business,’ he said. ‘It’s been a tough year for all businesses to find investors and even harder for companies like these that are years away from providing a return on investment.’

This view was echoed by Dr Andrew Blakers, Director of the ARC Centre for Solar Energy Systems at the Australian National University, a key stakeholder in the federal government-funded Australian Solar Institute, set up to foster collaborative R&D in solar energy.

‘The federal government has put in place a suite of policies that begin the process of building the solar industry in Australia,’ said Dr Blakers.

‘I would strongly encourage the government to greatly increase support for commercialisation and manufacturing of solar products in Australia, in order to ensure that Australian companies are competing on a level playing field with companies from other countries.

‘The alternative is that solar energy products to service the Solar Flagships and RET programs and the burgeoning solar market will be imported, with a poor industrial outcome for Australia.’

Published: 2009

Northern water assessment informs development capacity

Helen Beringen

It either doesn’t rain or it pours up north. Such variability is one of the challenges identified in the first consistent, analytical water assessment of northern Australia released from CSIRO’s Water for a Healthy Country Flagship. The work is informing thinking about the development capacity of the region.

Regional coverage of the Northern Australia Sustainable Yields Project.

Credit: CSIRO

Rainfall and runoff variability are just two components of a comprehensive review of water resources for water policy decisions which form part of the assessments undertaken by the Northern Australia Sustainable Yields Project.

Released by Parliamentary Secretary for Water, Dr Mike Kelly, at the RiverSymposium in Brisbane on 21 September, the study resulted from a March 2008 agreement by Council of Australian Governments (COAG) to extend the CSIRO work on sustainable water yields and availability that had been completed in the catchments of the Murray-Darling Basin.

Dr Kelly said the research would be a valuable resource to inform decisions about the conservation and development of northern Australia’s water resources.

‘From Broome in Western Australia to Cairns in Queensland, the Northern Australia Sustainable Yields (NASY) reports provide important information on current and likely future water availability in northern Australia,’ he said.

Despite popular perceptions that northern Australia has a surplus of water, the research found the extremely seasonal climate with continuously high temperatures meant that the landscape was annually water-limited, with little or no rain for three to six months every year, and very high potential evapotranspiration rates.

‘Northern Australia experiences high rainfall during the wet season, with most falling near the coast and with year to year amounts that are highly variable,’ said project leader Dr Richard Cresswell.

‘Runoff follows a similar pattern to rainfall, with most surface flow approaching the estuaries, with potential inland dam sites receiving less and quite variable amounts of water and suffering very high evaporation rates.

‘The very few river reaches that flow year-round are mostly sustained by localised groundwater discharge and have high cultural, social, ecological and developmental value,’ he said.

‘Groundwater may offer potential for increased extractions for development, though the highly dynamic nature of shallow aquifers, which rapidly fill during the wet season and drain through the dry season, means there is little opportunity to increase this groundwater storage and careful management is required where these groundwaters also provide sources for the few perennial rivers.’

Dr Cresswell said future climate predictions for the north suggest that evapotranspiration was likely to increase while rainfall was likely to be similar to historical levels, which were lower than the last decade, particularly in the west.

Speaking to ABC Rural, Joe Ross, Chair of the federal government’s Northern Australia Land and Water Taskforce (charged with finding new development opportunities in Northern Australia), said the CSIRO report confirmed that expectations for food production in the north have been ‘over the top’, and that there would be limited opportunity for broad-scale agriculture in the tropics.

The Taskforce’s submission to the government later this year will take into account the central findings of the CSIRO teams’ work. ‘It covers not only the amounts of water in northern Australia, but also what impact there’ll be on the livelihoods of the community of northern Australia, in particular, one of the main constituents being Indigenous Australians,’ Mr Ross said.

The Northern Australia Sustainable Yields Project is part of the Australian Government’s Northern Australia Water Futures Assessment (NAWFA), a five-year program to develop an enduring knowledge base to inform decisions about conservation and development of northern Australia’s water resources, so that any development proceeds in an ecologically, culturally and economically sustainable manner.

More information:

Dr Richard Cresswell: Richard.cresswell@csiro.au

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